Job Evaluation and its Limitations

Article shared by

The concept of job evaluation originated in the US in 1971. In 1909, the Civil Service Commission in Chicago and the Commonwealth Edison Company of Chicago pioneered the field. In 1926, Merill R. Lott wrote a book Wage Scales and Job Evaluation, describing methods used in his company, the Sperry Gyroscope Co., Inc. It is the process of determining the worth of one job in relation to that of another without regard to the personalities. It analyses and assesses the content of jobs to place them in some standard rank order. The end result is used as the basis for a fair and logical remuneration system.

A properly devised job evaluation scheme provides the management with definite, systematic, and reliable data for working out wage and salary scales. Thus, logical wage negotiation reduces the wage grievances and dissatisfac­tion with wage differentials and ensures a fair treatment for each employee. It also provides a logical basis for promotion.

A survey by the British Institute of Management indicated it could be used for:

ADVERTISEMENTS:

1. Reducing layout turnover

2. Increasing output

3. Improving morale

4. Reducing loss of time due to wage negotiation and disputes

ADVERTISEMENTS:

5. Reducing the complaints regarding wages

6. Reducing wage and salary anomalies

Job evaluation involves the performance of the following steps:

1. Thorough examination of the job (job assessment)

ADVERTISEMENTS:

2. Preparation of job description (recording its characteristics to suit as­sessment of method)

3. Preparation of job analysis to set out the requirements of the job under various factor headings

4. Comparison of one job with another

5. Arrangement of jobs in a progression

ADVERTISEMENTS:

6. Relating the progression of jobs to a money scale

Limitations of Job Evaluation:

Job evaluation alone cannot establish a wage scale. For wage fixation, we need to take into cognizance statutory requirements, such as Minimum Wages Act, 1948. Similarly, other factors of wage fixation such as capacity to pay, inter­-industry wage variation, inter-regional wage variation, collective bargaining agreement, if any, also need to be given importance. Job evaluation is highly subjective (being based on a judgmental estimate). Similarly, it cannot take into account the cyclical effect of the market value of the occupations.

For example, finance jobs were highly priced in die market at one point of time (now IT and marketing have taken its place). However, with the failure of NBFC, finance jobs are not that highly priced in the market at least at this point of time, even though no material change in the job profile of finance professionals has taken place since then. Despite such limitations, the job evaluation technique is considered very useful for reasons explained earlier.